Indian Airlines Face Profit Slump Amid Fuel and Forex Headwinds

The Indian aviation sector is bracing for a challenging fiscal year as geopolitical tensions and currency volatility squeeze margins. A recent report by Crisil suggests that domestic carriers could see a significant decline in operating profits due to a combination of rising fuel costs and external economic pressures.

Profitability Forecasts Under Pressure

According to a report released by rating agency Crisil, the combined operating profits of Indian domestic airlines are expected to fall by 10% to 15% this fiscal year. While the industry recorded operating profits of approximately Rs 19,000 crore in the previous financial year, that figure is now projected to drop to between Rs 16,000 crore and Rs 17,000 crore.

This decline is primarily driven by the inability of airlines to pass on the full extent of rising costs to passengers through higher fares, alongside necessary capacity rationalisation. Even if the Middle East conflict settles, the report suggests that the structural cost increases may linger.

The ATF and Forex Double Whammy

Aviation Turbine Fuel (ATF) remains the most significant variable expense for airlines. Under normal conditions, jet fuel accounts for roughly 40% of operating expenses, but during periods of extreme volatility, this share can skyrocket to nearly 60%. The Middle East conflict pushed global ATF prices more than 50% above pre-conflict levels. Although prices have moderated from a peak of $145 per barrel to below $125, they remain substantially higher than the $90 average seen in the previous fiscal year.

Adding to this burden is the depreciation of the Indian rupee. Since a vast majority of airline expenses—including aircraft leases, maintenance, and fuel—are denominated in foreign currencies, the weakening rupee significantly inflates the cost of operations for Indian carriers.

Rising Lease Costs and Fleet Expansion

While airlines are aggressively expanding their fleets to meet growing demand, this growth comes at a high price. Lease rental expenses are expected to rise by approximately 15% this fiscal, reaching an estimated Rs 27,000–28,000 crore.

Crisil은 영업 이익의 둔화와 리스 부채의 증가가 결합되어, 항공사가 내부 유보금만으로 이러한 리스 비용을 감당할 수 있는 능력을 약화시킬 수 있다고 경고합니다. 정부가 국내 항공유(ATF) 가격 인상 폭을 25%로 제한하기로 한 결정(2026년 4월 1일부터 시행)이 장기적인 완충 역할을 제공하겠지만, 당면한 재무적 압박은 여전히 심각합니다.

글로벌 맥락: 격동의 산업 분야

인도의 이러한 어려움은 전 세계적으로도 나타나고 있습니다. 국제항공운송협회(IATA) 또한 2026년 글로벌 항공사 수익 전망치를 하향 조정했습니다. Willie Walsh IATA 사무총장은 항공유 가격의 급등과 걸프 지역의 비행 경로 차질이 동시에 발생하며 업계에 '퍼펙트 스톰'을 일으켰다고 강조했습니다. 이러한 역풍에도 불구하고 여객 수요는 견조하게 유지되고 있으며, 이는 수익성은 압박을 받고 있지만 근본적인 여객 수요 성장은 여전히 강력하다는 것을 시사합니다.

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